The Chancellor looks set to announce a new tax break for married couples in next month’s Autumn Statement, while universal credit continues its slow and increasingly painful roll out. Both are heralded by the Coalition as flagship policies to support families by raising incomes, helping more parents into work and promoting stable family life. In practice, neither will provide the help that Britain’s couple families need to cope with the growing pressures of time and money that push too many into poverty and put enormous strain on relationships.

A tax break for married couples has long been a core demand of social conservatives, who argue it signals the state’s support for marriage over cohabitation and recognises parents who choose not to work so they can take care of their children. Promoting strong relationships, including marriage, is vital but this approach is out of tune with how most couples want to organise family life. Most want more help to share care and work rather than encouragement to pursue an outdated single breadwinner model.

New IPPR research for the Joseph Rowntree Foundationshows that marriage tax breaks also ignore the reality that having both partners in work provides strong protection against poverty. One in five couple families with children live in poverty compared to just five per cent of dual-earning families. Meanwhile, under universal credit, couples will find it makes less financial sense for both parents to work. Countries that have sustained the lowest rates of child poverty, mostly the Nordic nations, have the highest rates of dual-earning among couples, alongside much higher employment rates for lone parents.

A more effective way of supporting strong family relationships and boosting parental employment would be to provide practical support when couples need it most, working with the grain of how today’s couples want to organise family life. As a first step, universal credit needs to work better for couples. An earnings disregard for second earners would allow them to keep more of their earnings before the family starts to lose universal credit. Having both partners in work would make more financial sense for low-income families. The Coalition’s plans to expand free childcare for poorer families are a good step, but we need to be more ambitious about making good quality childcare affordable for all families – to support dual-earning and make sure every child benefits from excellent early learning.

We should also be making it easier for dads to get away from the office and spend time at home. This is good for children, makes it easier for mums to work, and helps to sustain strong relationships within couples. Most dads want to have a bigger role at home, but fathers in Britain are more likely to work long hours than in most European countries. Better paid, longer paternity leave and changing workplace attitudes so that flexible working becomes the norm for fathers as well as mothers should be a priority. And couples experiencing relationship problems would be better served by stronger public investment in relationship support and counselling of the kind provided by charities and specialist therapists than by a small tax break.

The aspiration to boost parental employment and support strong family relationships, including marriage, is the right one. But in their current form, marriage tax breaks and universal credit will do little to advance either goal. Instead, we need to make universal credit, family leave and childcare work better for couples (married or not), and make sure practical support is in place when relationships come under pressure.

7 Comments

“New IPPR research for the Joseph Rowntree Foundation shows that marriage tax breaks also ignore the reality that having both partners in work provides strong protection against poverty.” or to put it another way two-income families already tend to be much better off than those where one partner is unemployed so you propose to give them more support?

Peter Davies is spot on. The facts quoted support the opposite of the point you are trying to make. Britain is unusual in not considering the household income tax burden. Dual earning families are taxed much lower than families at the sale income level where one parent is working, yet the savings in social costs to society from the benefits of the model you describe as outdated are huge.

Research show that Reducjng the tax burden for single income families lifts more people out of poverty than the same financial value applied to raising the starting rate of personal tax allowances.

So if we really want to help lift children out of poverty we need to drop the prejudices about traditional lifestyles and govern in line with what the data and evidence shows so clearly.

Good stuff. Lib Dem policy adopted at conference is to review Universal Credit with an eye to possibly introducing a separate disregard for second earners. We also need and want to go further on childcare and paternity leave.

Peter and Rich: there’s a big difference between 1) enabling couples to protect themselves from poverty by both working and 2) accepting as permanent the relative poverty of one-earner households and perpetuating it through tax breaks. With universal credit we’re talking about the poorest 30% of households: Kate’s suggestion doesn’t help the well-off; it removes a barrier to poor couples becoming well-off.

The fact is that without a second disregard, as soon as a woman (9 times out of 10 it is) starts earning she faces a marginal rate of 65%. With a (full) ‘marriage tax break’ you need to add 20% income tax before that as well as she won’t have her own personal allowance. I reckon that makes a 72% tax rate on the first pound she earns before we even consider the cost of childcare. What a great way to keep women out of the labour market!

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